At CUB we get a lot of calls from consumers who have questions about renewable energy plans that get pitched to them by alternative suppliers. These “green plans” are a legitimate choice, but some people have complained about exorbitant rates. If you’re shopping in the market, you should have all the facts.
Generally, there is some confusion over what a “green” plan actually is. Signing up for green energy does NOT guarantee that energy from renewable sources—wind and solar farms—is being pumped into your home. There’s just no easy way to determine if the electricity you’re constantly consuming is coming from a wind turbine, a nuclear plant, a coal plant or any of the thousands of sources of power.
Instead, signing up for a “green” offer means that you’re purchasing Renewable Energy Credits (RECs). So, for example, if you’re on a 100 percent renewable energy plan, it means that for every kilowatt-hour (kWh) of electricity you use, the same amount of renewable energy is being added somewhere on the grid—not necessarily to your microwave.
Also, remember that a green plan doesn’t have to be 100 percent green. For example, if you signed up for a “50 percent green” plan and used 1,000 kWh of electricity in a month, you would claim the environmental benefits of adding 500 kWh of renewable electricity somewhere on the power grid. (Read CUB’s fact sheet on green plans.)
If you’re considering such a plan, make sure you have full details on the pricing:
- How does the green plan compare to the utility’s rate? You’re likely to pay a premium for a green plan, but there’s a wide range of prices. CUB checks alternative supplier rates, including green plans, on a weekly basis. .
- Is the price expected to change? Ask if the plan is a variable rate that could go up each month, and if the price you’re quoted is an introductory rate that will go up after a short period.
- Is there a monthly fee connected to the plan? That will inflate your advertised rate.
Don’t forget that the regulated utilities have green power too. The state’s Renewable Portfolio Standard (RPS) requires Ameren and ComEd to supply a certain percentage of renewable energy (25 percent by 2025). RECs are purchased to help Illinois utilities comply with that law.
Finally, don’t think you have to pay more for electricity with a green plan to do good for the environment. The best way to help the planet and your pocketbook is by reducing your electricity consumption (energy efficiency!) and/or moving your electricity demand to off-peak hours. Here are some optional programs to do that:
Peak Time Savings (offered by ComEd) and Peak Time Rewards (offered by Ameren) are no-cost programs that allow people with new digital electric meters to get a bill credit for reducing their energy usage during certain summer days. By reducing power usage during peak hours (usually hot summer afternoons), consumers can get a financial benefit, and they help reduce the need to run expensive, high-polluting power plants.
Hourly Pricing (ComEd) and Power Smart Pricing (Ameren) charge you an hourly rate for electricity. It’s not for every home, but participants in ComEd’s program saved an average of about 14 percent on the supply portion of their bills in 2015.
Remember, having choice in the market means you–and not a sales pitch–determines how your home defines what it means to be “green.”